There was a weird and wild rally in the S&P futures overnight. I see 3 structures forming: 1) a strict bullish channel (yellow), 2) a bull flag (blue) and 3) a megaphone (red), all of which revolve around the right shoulder of a potential head and shoulders pattern that I have been discussing the last few days.
What's weird about the bullish channel that formed last night is that it does not have the parabolic look of a short squeeze, yet it is as relentless as one. It looks to be entirely algo-driven because of how strict it is and how well it took breaths on the fib retracement levels from the top of the shoulder on the 5th to the bottom on the 6th.
If it were a breakout of the bull flag, which it has strictly speaking done, it should be doing so with more gusto.
But it smacked right into the top of the megaphone structure, though it has tried to break out a couple of times now. That megaphone structures is what's keeping the head and shoulders intact. It preserves the series of lower highs since the 5th that is our evidence of a continued downtrend since the top of the head formed the other day. The next few hours will be telling because now it's all smashed in in there: it has to either break up out of the megaphone, or give up that relentless bullish channel because the hallway has ended.
Will the humans win? Stay tuned...
What's weird about the bullish channel that formed last night is that it does not have the parabolic look of a short squeeze, yet it is as relentless as one. It looks to be entirely algo-driven because of how strict it is and how well it took breaths on the fib retracement levels from the top of the shoulder on the 5th to the bottom on the 6th.
If it were a breakout of the bull flag, which it has strictly speaking done, it should be doing so with more gusto.
But it smacked right into the top of the megaphone structure, though it has tried to break out a couple of times now. That megaphone structures is what's keeping the head and shoulders intact. It preserves the series of lower highs since the 5th that is our evidence of a continued downtrend since the top of the head formed the other day. The next few hours will be telling because now it's all smashed in in there: it has to either break up out of the megaphone, or give up that relentless bullish channel because the hallway has ended.
Will the humans win? Stay tuned...